The Queensland Government has declared Shell’s coal seam gas-to-liquefied natural gas (CSG to LNG) project on Curtis Island “Significant” allowing Shell to submit an environmental impact statement.

Shell announced they will begin to prepare the statement to develop the project further, with plans to produce first gas from its terminal at Gladstone by 2015.

The project is expected to produce up to 16 million tonne of LNG a year, involving phased construction of up to four LNG processing `trains’, with CSG drawn from acreage jointly owned by Shell and Arrow Energy Ltd in south east and central Qld.

During peak construction, it is estimated that up to 3000 people would be employed at the plant.

In 2009, Shell acquired 30 per cent of Arrow Energy’s CSG resources, providing potential supply for LNG production. Though there have been concerns that it does not have access to adequate gas reserves to feed a large-scale LNG plant.

State One Stockbroking Ltd industry analyst Peter Kopetz told reporters that Arrow was a potential takeover target for Shell as it seeks to secure more CSG resources to underpin its LNG ambitions.

Arrow has an option to acquire a 20 per cent stake in a potentially competing CSG-to-LNG joint venture project at Gladstone, dubbed Fisherman’s Landing.

Maurice Brand, managing director of LNG Ltd, which has a 40 per cent stake in the Fisherman’s Landing project, told reporters it was “two to three years ahead” of other CSG-to-LNG projects in the Gladstone area.

Other companies proposing to develop CSG-to-LNG projects in the region include Britain’s BG Group, Origin Energy Ltd, ConocoPhillips, Santos Ltd and Malaysia’s Petronas.

First exports from Fisherman’s Landing are expected in late 2012 but resources sector consulting group Wood Mackenzie recently said in a report that the BG-operated Queensland Curtis project was the most advanced, with several milestones met.